natural capital: counting it in!

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NATURAL CAPITAL: COUNTING IT IN!

Allaine T. BaacoWestern Philippines University

Puerto Princesa Campus

Western Philippines University

Western Philippines University

Overview of presentation Understanding the environment Defining economic valuation SEEA Framework Significance of economic valuation of natural

resources in the National Income Accounting

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Western Philippines UniversityWestern Philippines University

Environment

Composed of different ecosystems.

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Ecosystems

A dynamic interaction of plants, animals, microorganisms community and the nonliving physical environment as one unit.

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Ecosystems Services

Benefits people obtain from ecosystems.

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Ecosystem BenefitsWestern Philippines University

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Economic Values of the Environment

Why?

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IN A WORLD WHERE MONEY TALKS, ENVIRONMENT MUST HAVE A “VOICE” SO THAT IT CAN

BE HEARD.

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VOICE

,$, £, ¥, €

(ECONOMIC)

~ VALUE

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We consider environmental valuationWestern Philippines University

Resource Allocation Decisions• Efficient choice in the

use of scarce resources

Resource Pricing• Services• Damaging impacts

Distributional Impacts• Gainers• Losers

Awareness Raising• Losses• Opportunities

Measure opportunities from the environmental changes

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Definition

Economic valuation techniques re-defines the previous conception of nature as a complex web of inter-related and ever-changing relationships into an image of nature as a provider of measurable services.

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Western Philippines University

Definition

Economic valuation can generate estimates of the value of ecosystem services in monetary terms.

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Western Philippines University

Monetary valuation of Ecosystem services Monetary valuation via markets, particularly

provisioning services, are traded in markets and Monetary valuation via surrogate markets for services not traded in the market, particularly the regulating and support services

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In Accounting…Western Philippines University

STOCKS(Natural capital)

FLOWS(Ecosystems & abiotic services) VALUE

(Goods & Services)

VALUE(Maintaining ecological function)

MISSING

VALUE(Nature as nature)

MISSING

Figure modified from the natural capital protocol.

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Methodology:

The SEEA Expanding the Systems of National Accounts

(SNA) to the environment contains the internationally agreed standard

concepts, definitions, classifications, accounting rules and tables for producing internationally comparable statistics on the environment and its relationship with the economy.

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Environmental Services and human well-being:Ecosystems & Biodiversity

Servicee.g. wood that is harvested

Capacity(function)

e.g. growth of biomass

e.g.

photosynthesis

Biophysical Structure or process(functioning)

e.g. wood supply for furniture

Benefit(s)

Human well-being

Value

e.g. value of wood used for furniture

Cascade Diagram, modified from Haines-Young and Potschin)

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Western Philippines University

Environmental Services: Provisioning services: the

products that can be extracted from or harvested in ecosystems

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Environmental Services: Regulating Services: regulation of

ecological, hydrological and climate processes

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Environmental Services: Cultural services: the non-material benefits

from ecosystems (e.g. recreation, education and research)

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Environmental Services: Support services: Ecosystem services that

are necessary for the production of all other ecosystem services. Some examples include, production of atmospheric oxygen, and provisioning of habitat.

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Western Philippines University

Linking Services to Values

Provisioning Services

Ecosystem

Regulating Services

Cultural Services

Support Services

Direct use values

Indirect use Values

Option Values

Non-use Values

Total Economic Value

Step 1. Specification of boundaries and system to be valued..

Step 2. Assessment of ecosystem services in bio-physical terms

Step 3. Valuation using monetary or other indicators..

Step 4. Aggregation of the different values

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Ecosystem services and valuing methods:SERVICE VALUE INDICATORTimber Opportunity cost

Non-Timber Forest Products Market value of products

Biodiversity Pharmaceutical genetic material

Carbon sequestration and Carbon Stock Social Cost of Carbon

Water Supply Resource Charge

Water Purification Averting Expenditure Method

Soil protection Replacement of forest for soil retention

Ecotourism/Recreational Value Travel Cost Method

Oxygen Production Cost of Hospital Oxygen

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Economic valuation enables

agencies to respond more effectively to an unavoidable cost of economic

development and growth

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Natural inputs(raw materials)

Economic Activity

ENVIRONMENTAL ASSETS(Capital stocks, Environmental Quality)

Residuals (emissions,

waste)Ameneties,

Health & Safety

Outputs Inputs

IncomeGoods/Services

LaborCapital

Resouces

Service Function

Resource Function

Sunk Function

PoliciesMeasuresOpportunities

TaxesSubsidiesRegulations

InvestmentsResearchInnovationTradeEducation & Training

Economic Opportunities & Policy Responses

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Maraming Salamat po!

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References:Baaco, A. T. , J. M. Javier, H. G. Lagan, B. Montaño, and R. Sariego. 2015.

Economic Values of Mount Mantalingahan Protected Landscape.Briones, N. D., A. T. Baaco, J. M. Javier, R. G. Dolorosa and S. Tabayag. 2016.

Biodiversity values of Rasa Island Wildlife Sanctuary.Cambridge Conservation Initiative. 2016. Biodiversity at the Heart of Accounting

for Natural Capital: the Key to CredibilityDvarskas, Anthony. 2013. SEEA and the Green Economy. United Statistics

Division. July 3, 2013.European Union. 2013. Mapping and assessment of ecosystems services: An

analytical framework for ecosystem assessment under Action 5 of EU Biodiversity Strategy to 2020. Discussion paper – Final. April 2013.

Natural Capital Coalition. 2016. Natural Capital Protocol.

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References:SEEA CF 2012. 

System of Environmental-Economic Accounting 2012 – Central Framework. Ed. United Nations, European Union, Food and Agriculture Organization of the United Nations, International Monetary Fund, Organisation for Economic Co-operation and Development and The World Bank. ISBN: 987-92-1-161563-0